EMISSIONS

Climate action relied on natural gas. Then CO2 spiked

Natural gas power plants are emitting high levels of greenhouse gases. The Eagle Valley plant in Indiana is pictured. Indianapolis Power & Light

America has followed a simple formula for reducing carbon emissions this century: Retire old coal plants, replace them with natural gas, add a dash of renewables.

But the limitations of that approach came into focus in 2018, when power-sector emissions rose for the first time in five years. That bump was all the more notable given a near-record year for coal plant retirements (Climatewire, Jan. 2).

The increase raises questions about America's reliance on coal-to-gas switching to drive down greenhouse gas emissions. And it underscores the stark reality facing U.S. carbon cutters: The chief source of emissions reductions in recent years has not been wind or solar. It's a fossil fuel.

"This isn't the huge transition that is necessary to meet the climate challenge, and I do think utilities are a big part of it," said Leah Stokes, a professor who studies power-sector and political trends at the University of California, Santa Barbara. "It's easier to build a natural gas plant, fits with business as usual, and they can ramp it on and off."

American power companies have shouldered the burden of U.S. emissions reductions in recent years. Power-sector emissions fell 28 percent between 2005 and 2017, according to the U.S. Energy Information Administration, even as carbon levels from other sectors of the economy rose.

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Many utilities are promising to push further still.

Alliant Energy Corp., Ameren Corp., American Electric Power, Consumers Energy, DTE Energy and WEC Energy Group Inc. are among the utilities that have pledged to cut emissions 80 percent by midcentury.

A growing number of power companies have begun replacing coal with renewables. Xcel Energy Inc. will close two coal units a decade early and replace much of its capacity with renewables, as part of a wider push to completely decarbonize by midcentury (Climatewire, Dec. 5, 2018).

Northern Indiana Public Service Co. similarly announced last year its intention to close all its coal plants within a decade and replace its power with a combination of renewables and energy efficiency (Climatewire, Sept. 21, 2018).

But those cases remain an exception to the rule. More frequently, power companies have turned to gas to replace aging coal facilities, like in the case of DTE, which is building a nearly $1 billion gas plant to replace several old coal facilities. The Detroit-based power company estimates the new plant will emit 70 percent less carbon than its retiring coal counterparts (Climatewire, Oct. 26, 2018).

"I've also said to people the CO2 reduction is not an exercise in purity," DTE CEO Gerard Anderson told E&E News last year. "We got to get it done, and we got to get it done in a way that works for our society."

DTE is hardly alone. American power companies installed 46.3 gigawatts of natural gas between 2013 and 2018, EIA figures show. Of that total, 21 GW of new gas capacity was expected to come online in 2018. Wind and solar, by comparison, added 33 GW and 23 GW of new capacity over that five-year period.

The trend could continue. Wind is expected to be the top source of new capacity in 2019, but natural gas is predicted to reclaim that title in 2020 and 2021.

"Gas is going to continue to grow. Coal retirements will continue," said Matthew Hong, an analyst who tracks the power sector at Morningstar Inc. "What the industry is trying to figure out now is reliability. With the growth in solar and wind generation, natural gas for the time being is going to be needed to ensure a reliability of electricity."

Power companies' reliance on gas is a double-edged sword for climate hawks. When a natural gas plant replaces a coal facility, there is a climate benefit. Gas plants emit about half of what's puffed into the air by their coal counterparts. EIA estimates that coal-to-gas switching is responsible for two-thirds of power-sector emissions reductions between 2005 and 2017. Renewables account for the remaining third.

But when gas plants run harder to meet an increase in electricity demand, emissions go up.

That's what happened in 2018, when a combination of weather events and a hot economy prompted the first increase in electricity demand in years. Power-sector emissions rose 1.9 percent as a result, as gas plants ran more to satisfy robust demand for electricity (Climatewire, Jan. 10).

The dynamic highlights the diminishing climate returns of adding more gas plants, said Joshua Rhodes, a power-sector researcher at the University of Texas, Austin.

"The climate cares about actual tons, not [emissions] intensity," he said. "Any natural gas built to serve new demand will not have climate benefit."

Indeed, carbon emissions from gas plants are on the rise, increasing 59 percent between 2005 and 2017, according to EIA figures. The growing reliance on gas will make it difficult for many power companies to achieve their deep decarbonization goals, analysts said.

"At some point, for our carbon emissions to continue to go down, traditional natural gas is not going to get us there anymore," Rhodes said.

There is some debate about whether gas can be reformed, or whether it needs to be displaced entirely.

Natural gas interest groups point to the industry's improving efficiency. The American Gas Association, which represents natural gas utilities, noted in a statement that more Americans are using gas to heat their homes than ever before but emissions from the sector continue to decline.

And there is some hope that natural gas electricity generation could someday be carbon free. A Texas company is experimenting with a natural gas demonstration project that could almost achieve carbon-free power (Greenwire, Jan. 16, 2018).

But others think government intervention is necessary. While the cheap price of natural gas has been the primary force behind coal plant retirements, low gas prices also pose a threat to nuclear facilities and a hurdle to new renewable generators.

Liberal states have begun to take matters into their own hands. California recently passed a law calling for 100 percent carbon-free electricity by 2045. New York Gov. Andrew Cuomo (D) and Washington Gov. Jay Inslee (D) are planning to follow suit with similar proposals. And several New England states have begun awarding long-term contracts to offshore wind and hydroelectric projects. Connecticut, notably, awarded such a contract to a nuclear plant earlier this month.

The problem is that leaves large swaths of the country behind, said Stokes, the UC Santa Barbara professor. "That does not add up to resolving the problem," she said.

"You are going to need the federal government to do something like the Clean Power Plan, which we saw contested by some states," Stokes said. "It is going too slow in the market, and the policies that exist are increasingly coming from Democratic states and not Republican states."